Norway’s new government on 8 November 2013 presented its “adjustments” to the 2014 budget. The proposal to limit interest deductions on related-party loans, for the most part, will move forward from the prior budget proposals and will be implemented with an effective date of 2014.
Application of a rule to limit the tax deduction for interest expenses under the related-party rule was however delayed for the petroleum sector.
Tax program for 2014
The new administration’s changes to the 2014 budget include the following provisions:
– A reduced income tax rate for individuals and corporations, reduced from 28% to 27%;
-An increased rate of social security contributions for individuals, increased by 0.4%; and
-Repeal of the inheritance tax.
The proposal to limit interest deductions on loans to related parties continues to be included in the proposals and the effective date will be 1 January 2014, for accounting years ending in 2014.
